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AI insurance
AI product liability insurance covers your legal liability when an AI product, AI-enabled device or robot you make or supply injures someone or damages property. It matters because UK and EU law is moving to treat software and AI systems as products, bringing developers into strict liability regimes built for physical goods.
Part of: AI insurance UK
In short
Professional indemnity covers financial loss from AI mistakes; product and public liability cover injury and property damage. If your AI is built into devices, robots or machinery, or people act physically on its advice, you need to know which policy responds. In Great Britain the Consumer Protection Act 1987 imposes strict liability for defective products, but does not clearly cover standalone software. The Law Commission is consulting until 14 January 2027 on bringing software and AI systems into scope. The EU's Directive (EU) 2024/2853 already does so for products placed on the EU market after 9 December 2026.
Most AI claims are about money, and sit with professional indemnity. Product and public liability deal with injury and physical damage, which become realistic once AI moves into devices, machines and robots, or its advice is acted on physically. For the wider picture, see what AI insurance is.
| Cover | What it usually responds to | Illustrative AI example |
|---|---|---|
| Public liability | Injury or property damage caused by your business activities, for example on a client's site | An autonomous cleaning robot being demonstrated at a client's warehouse collides with a visitor |
| Product liability | Injury or property damage caused by a product you made, supplied, imported or put your name to | A computer vision module you sell is built into a forklift safety system and fails to detect a worker |
| Professional indemnity | Financial loss caused by a negligent error in your advice, design or service | An AI demand-forecasting tool over-orders stock and the client sues for the cost |
Which policy responds depends on the wording, the facts and how your AI work was described to the insurer.
PI wordings commonly exclude bodily injury and property damage, sometimes with a narrow carve-back for injury caused by professional advice. Public and products liability wordings commonly exclude claims arising from professional advice or design. If both exclusions bite, there is a gap.
An illustrative example: an AI predictive maintenance service tells a manufacturer that a press is safe to run for another month. A guard fails and an operator is injured. The injury looks like a liability claim, but it arose from advice. The same issue arises for AI agents that take actions in physical systems. Ask how such a claim would be handled, and get the answer from the wording.
In Great Britain, Part I of the Consumer Protection Act 1987 makes producers strictly liable for damage caused by defective products, without the claimant proving negligence. Under section 2, liability falls on the producer, anyone who holds itself out as producer by putting its name or mark on the product, and anyone who imported it into the UK to supply it in the course of business; liability is joint and several. A product is "any goods or electricity", including a component of another product. Software is not mentioned.
Under section 5, recoverable damage is death, personal injury and damage to property ordinarily intended for private use, excluding the defective product itself and property claims of £275 or less. Section 4(1)(e) gives a development risks defence where the state of scientific and technical knowledge at the time would not have let a producer of similar products discover the defect.
Whether standalone software or an AI system is a "product" under the Act is not settled. For an AI-enabled device it matters less: the device is plainly goods. For standalone software, a claimant would usually rely on negligence or contract, and a products liability policy can respond to negligence claims for injury or damage, subject to the policy terms.
The Law Commission is reviewing Part I of the Act for England and Wales, saying its "focus on damage caused by tangible products is no longer appropriate". Its consultation opened on 8 October 2026 and closes on 14 January 2027. Provisional proposals include:
These are proposals, not law. The final report is expected in late 2027, and the government would then decide whether to legislate.
Directive (EU) 2024/2853, adopted on 23 October 2024, repeals the 1985 directive with effect from 9 December 2026, which is also the transposition deadline for member states. It applies to products placed on the market or put into service after that date.
This matters to UK firms selling AI products into the EU, and in Northern Ireland, where the directive applies to products placed on the Northern Ireland market. EU importers carrying that liability are likely to look closely at your insurance. A separate proposed AI Liability Directive was withdrawn by the European Commission in October 2025.
Self-driving vehicles have their own regime. Under section 2 of the Automated and Electric Vehicles Act 2018, in force since 21 April 2021, where an insured automated vehicle driving itself causes an accident, the motor insurer is liable, with a right to recover from others who are liable. See the Automated and Electric Vehicles Act 2018.
Apex has an AI insurance scheme with an insurer in which your specific AI work is written into the policy as insured activity, rather than left to a generic business description. Cover options are professional indemnity, cyber, product / public liability and IP infringement, so injury, damage and financial loss exposures can sit in one policy and you pick the options you need; cover for US exposure is available, subject to the insurer's underwriting and the policy terms. To quote we need a precise description of what your business does with AI, your address, your turnover (including how much comes from the USA and Canada) and the limit of indemnity you want. You can start an AI insurance quote online in a few minutes, and the AI insurance guide explains the other cover options.
See also: AI insurance for healthcare and medtech · The EU AI Act for UK businesses
If your software is built into physical products, controls machinery or devices, or gives recommendations people act on physically, product and public liability cover is worth considering. Whether standalone software is a "product" under the Consumer Protection Act 1987 is unsettled, but negligence claims for injury or damage are still possible, and the Law Commission has proposed bringing software and AI systems into scope.
Not clearly. The Consumer Protection Act 1987 defines a product as "any goods or electricity" and does not mention software. The Law Commission's consultation, open until 14 January 2027, proposes that software and AI systems should be products however they are supplied. The EU's new Product Liability Directive already treats software as a product for items placed on the EU market after 9 December 2026.
Potentially several parties: the manufacturer of the robot, the developer of a defective AI component, an importer or own-brander, and the business operating the robot if it was negligent. The injured person can choose whom to sue, and the defendants then argue over contribution, often under their contracts. Product and public liability policies are the usual covers for injury claims, subject to the policy terms.
Often not fully. Many PI wordings exclude bodily injury and property damage, sometimes with a narrow carve-back where injury results from professional advice. Liability wordings, in turn, often exclude professional advice. Firms whose AI outputs could lead to physical harm should check both policies together so a claim does not fall between them.
It applies to products placed on the EU market or put into service after 9 December 2026, wherever the manufacturer is based. If a UK manufacturer has no EU presence, the importer, authorised representative or fulfilment service provider can be liable, so EU partners are likely to ask about your insurance. It also applies to products placed on the Northern Ireland market.
Tell us what your AI work is, where you are based, your turnover and the limit you need. It takes a few minutes online, and a broker will come back to you with options. Or call 0117 325 0027.
Start an AI insurance quote Request a callbackApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.
